Silver Price Forecast: XAG/USD sticks to gains near mid-$66.00s; 23.6% Fibo. holds the key
- Silver regains positive traction, though it remains confined in the previous day’s broader range.
- The mixed technical setup warrants some caution before positioning for any further move up.
- A break above the 23.6% Fibo. hurdle is needed to back the case for additional near-term gains.
Silver (XAG/USD) attracts fresh buyers following the previous day's two-way price moves and trades around the $66.40-$66.45 region during the Asian session on Tuesday, up nearly 0.50% for the day. The white metal, however, remains below last week's swing high, around the $67.25-$67.30 region, warranting caution for aggressive bullish traders.
The said area represents the 23.6% Fibonacci retracement level of the July-August rally and should act as a key pivotal point. The white metal currently sits just above the 100-day simple moving average (SMA) at $66.32, holding a mildly bullish near-term bias. Moreover, the cluster of Fibonacci retracements below—most notably the 38.2% level at $64.87 and the 50% line at $62.93 — suggests a layered demand zone underpinning the recent advance.
Adding to this, the Relative Strength Index (RSI) around 54 reinforces a balanced but constructive tone, indicating the metal is neither overbought nor oversold while it consolidates above its key trend marker. However, the Moving Average Convergence Divergence (MACD) indicator remains slightly negative and hints at waning upside. Hence, a sustained break above $67.27 would be needed to open the way for a retest of the higher zone.
The white metal might then climb to a more substantial barrier at the prior cycle anchor near $71.14. That said, a failure to clear this cap would keep XAG/USD confined to a range supported by the underlying Fibonacci and moving average structure. Meanwhile, immediate support is located at the 100-day SMA at $66.32, with secondary levels emerging at the 38.2% Fibo. retracement at $64.87 and the 50% retracement at $62.93 should corrective pressure deepen.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
XAG/USD daily chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
